Dear Scott,

I receive your newsletter and love it. Very helpful!

Recently I have taken out a debt consolidation loan. The time from application for the loan to closing on the loan was 3 months. The consolidation loan included preprinted checks made out to each of my creditors (5) with the total balance owed at the application time.

The problem was that during the 3 months before closing I had been paying the minimum payment, so when the loan closed and the checks were issued, the check amount was higher than the actual balance.

I have received credit checks from all but one of the creditors for the difference. I have sent 2 letters to the customer service address requesting the account be closed and a check be issued.

It has been 2 months with no response from the creditor. I have received 2 statements showing the credit. What is the next step to getting the money back?

They owe me $179.00, too much money to walk away from. What is very upsetting to me is that, if I owed them money, I would have to pay late fees, interest and get marks on my credit report.

Sincerely,
Aimee

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Aimee,

Thanks for writing! I love your attitude!

They should be required to pay you a late fee! I doubt that will ever happen, but maybe someday a law can be added to the books that would require late fees due the consumer in this situation.

I have certainly been in similar situations. By making an overpayment to any creditor, you create a credit balance. That credit balance must be returned to you. You asked for a check twice and they haven't sent it.

Here's what I would do...

1) I'd call and speak to a customer service rep to see what's going on with the check. Maybe they sent it and the "check is in the mail."

2) If I still didn't receive the check, I'd use the credit card for my normal shopping, groceries, etc. Once I spent $179 I'd stop. If I went over $179, I'd pay them the difference and never use the card again.

3) Here's a technique you can try if you don't mind more hassle. I would do it because I'm also interested in finding out the results of creative financial techniques and telling everyone what happened. If I had credit checks issued on that credit line I'd write myself a check for $179 and deposit it into my personal checking account.

There a few possible complications with this plan: The first is if they have already sent you a check for $179, then it would be a cash advance and subject to cash advance fees.

The second complication would be that even if they haven't issued you the check they may still try to charge you a cash advance fee, even though it's your money! In fact, I bet they would charge you the fee. After writing the check, if I received a statement that the $179 brings my balance to zero, but I had a balance because they charged me a cash advance fee, I'd call the bank and ask to have the fee waived. They'd probably argue and say it's still a cash advance to which I would reply, "It's not an 'advance' against my credit line because it's not a loan, it's my own money!" If they still didn't waive the fee I'd formally dispute the charge. I don't know if you want to make a mountain out of a molehill however, it is an option.

4) Same as (3) but use the card at an ATM or do a cash-advance at a bank.

Please let me know the outcome of your situation--thanks!

Regards,
Scott